Invest to survive, Textor chief tells manufacturers

A member of the Gillard government’s manufacturing taskforce has urged the industry to stop waiting for federal assistance and view structural industry changes as an opportunity to invest in growth.

Textor Technologies managing director Phillip Butler said manufacturers needed to “aggressively" review their business models to exploit the strong Australian dollar, rather than just focusing on cost cutting.

Textor, which produces technical fabrics for hygiene and healthcare products, used the strong Australian dollar to invest in European-based manufacturing machines to double production, he said. “Doing nothing is a problem, investing to drive yourself out of this slow death is a gutsy move but it is essential," he said.

“We have a view that the dollar is going to be [above parity] for a long time. But one person’s problem is another person’s opportunity really.

“We believe it is the best possible time to invest because the average value of the Australian dollar against the euro means you’re getting a major discount on capital equipment that is purchased there."

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Mr Butler’s comments come as the federal government prepares its innovation statement on helping the manufacturing industry deal with a high local dollar and greater competition from cheaper offshore groups.

The statement, which is in response to the recommendations of the manufacturing taskforce, is expected before the federal budget in May.

Innovation Minister
Greg Combet
is not due to return to work until the end of January, and as the statement is not yet complete, cabinet has not considered any of its recommendations.

Australian Manufacturing Workers Union national secretary
Paul Bastian
is hoping the federal government will commit to bring forward infrastructure projects, underpinned by local products.

“We need to boost spending on residential and commercial construction and back it in with Australian-made content if we want to avoid more jobs losses like those recently announced at Boral and BlueScope steel," he said.

Shareholders and analysts supported Boral’s cost cutting initiatives.

“If successful, this should place the business on a better (perhaps superior) footing for the inevitable cyclical recovery," said Credit Suisse analyst Andrew Peros.